Saving money doesn't have to be hard. It's the little things you do now that will make a big difference later. The first step is to want to save money and then being aware of your money. When you can honestly say you are willing to do what it take to save money then you are ready to begin.
Ready! Set! Save!
1. Pay Yourself First - At Least 10% Of Your Pay Check!
Be the first in line to get a piece of your pay check not the last. Arrange with the bank to have a set amount automatically transferred from your checking account and deposited into an investment account. Invest this money and leave it alone. This is not your emergency fund, holiday fund or education fund - it is your retirement fund.
2. Don't Spend Your Bonus
Put at least half any bonus money, lottery winning, gift money or inheritance money into that investment account you set up in number 1. You weren't expecting the money so it shouldn't make a difference if you invest some of it.
These first two steps offer you an easy way to come up with some money. You may be looking at it now thinking you can't afford to save 10% of your income but really -you can't afford not to!
3. Pay With Cash
You'll pay more attention to what you're buying if you know you only have so much money in your wallet to make the purchase. You'll give yourself some extra time to think about that big purchase (is it a need or a want?) on the way to the bank for more cash. This should curb the impulse buying.
4. Raise The Deductibles On Your Insurance Policies
Most insurance policies come with a standard $250 deductible. If you increase this to $1000 your premiums will drop. Chances are you're not going to file a claim for less that $1000 any way because once you file a claim your rates could go up.
5. Get Rid Of Unnecessary Insurance
Do you really need glass coverage? Why do you have life insurance on your kids? Are you insured privately and through work? Not much use being double insured. Insurance is a great thing but look your policies over carefully and make sure you need everything you're paying for.
6. Pack A Lunch
It's a small thing but it adds up fast. If you spend $5 every day for lunch, that's $25 a week, a $100 per month or $1200 per year! I bet you can think of somewhere else to spend that money.
7. Pay Off Those Credit Cards!
Credit cards are great - if you pay them off every month! The interest on a credit card is astronomical. If you can't pay the cards off then go to the bank and take out a loan for the amount owing and then pay them off. You might pay 5-10% interest at the bank but you will pay 18-24% through the credit card company. Ouch!
You might want to burn that credit card and use an overdraft or line of credit from your bank instead.
The easiest way to find areas to save your money is to keep track of every penny you spend for a period of one month. Then go over the list with a find toothed comb and add up the unnecessary purchases. You might be surprised to see just where you spend your money.
Saving money is a matter of discipline. Don't try to keep up to the Jones'. Say "no" to impulse buying and shop around for everything from a cup of coffee to the new house. Get in the habit of asking yourself, "Do I really need that? or do I just want it?"
